- USD/CAD defends the 100-day SMA and bounces from the 1-month low reached on Thursday.
- Looming recession risks weigh on investor sentiment and benefit the safe-haven USD.
- A rally in oil prices could support the CAD and cap any significant advance in the pair.
The pair USD/CAD It attracts some buyers near the support of the 100-day SMA and staged a modest bounce from the 1-month low hit earlier this Thursday. The pair is holding on to its intraday rally gains during the European session and is currently trading just above the psychological level of 1.3500.
Softer risk tone helps safe-haven US dollar to regain some positive traction, which in turn pushes the USD/CAD pair higher. Despite the relaxation of strict COVID-19 restrictions in China, concerns about a deeper global economic recession continues to weigh on investor sentiment and keep any optimism in the markets at bay. That being said, a combination of factors could prevent dollar bulls from entering aggressive positions and limit further gains in the pair, at least for now.
The minutes of the December FOMC monetary policy meeting showed that officials unanimously supported raising borrowing costs at a slower pace. The prospects for minor rate hikes by the Fed are bolstered by the fact that US Treasury yields remain close to the three-week low reached on Wednesday. This should act as a headwind for the USD. Apart of this, a rebound in crude oil prices could support the CADa commodity currency, and justifies caution for USD/CAD bulls.
The US economic agenda includes the publication of the ADP report on employment in the private sector and the usual weekly initial claims for unemployment benefits. This, coupled with US bond yields and broader risk sentiment, will boost demand for the USD and provide some momentum to the USD/CAD pair. In addition, the dynamics of oil prices could help generate opportunities in the short term. However, attention remains focused on the monthly employment data for the US and Canada, which will be released on Friday.
USD/CAD technical levels
|Last price today||1,351|
|Today I change daily||0.0028|
|today’s daily variation||0.21|
|today’s daily opening||1.3482|
|previous daily high||1,368|
|previous daily low||1.3476|
|Previous Weekly High||1.3612|
|previous weekly low||1.3484|
|Previous Monthly High||1.3705|
|Previous monthly minimum||1.3385|
|Fibonacci daily 38.2||1.3554|
|Fibonacci 61.8% daily||1.3603|
|Daily Pivot Point S1||1.3412|
|Daily Pivot Point S2||1.3342|
|Daily Pivot Point S3||1.3208|
|Daily Pivot Point R1||1.3616|
|Daily Pivot Point R2||1,375|
|Daily Pivot Point R3||1,382|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.